Debt Consolidation Solutions:
Debt consolidation help and advice from Shire Direct!
Is it time to make a fresh start - financially speaking? Then perhaps you should read about the Debt Consolidation solutions, advice, and Debt Consolidation help available from Shire Direct!
Debt Consolidation is the act of combining your existing debt (such as credit and store cards, HP, personal loans, bank loans etc.) and repaying all the outstanding balances with one larger payment. Homeowners often carry out this exercise by raising the funds against the security of their homes, either by arranging a remortgage or a homeowner loan.
Let's explore the debt consolidation solutions, help and advice Shire Direct can provide when it comes to making a fresh start. We'll look at the benefits a debt consolidation solution can provide as well as any downsides to be wary of, and look at the debt consolidation help Shire Direct can provide to help you get back on track!
Debt Consolidation help and advice -
Table of contents:
Will a Debt Consolidation solution be a good idea for me?
The consolidation of your debt can be beneficial, but as ever, this will depend on your circumstances. Below we'll take a brief overview of the plus's and minus's of debt consolidation solutions.
Benefits of Debt Consolidation solutions
There are many benefits of consolidating outstanding debt by way of a remortgage or secured homeowner loan, and these include:
- A lower monthly outlay
Our economy has long since been run on a "buy now, pay later" basis. Many of us are quite easily seduced into buying more and more on credit, and somehow we convince ourselves that our new-fangled, 88 inch wide-screened high-definition plasma telly is affordable just because it only costs £9.50 a week (for the next ten years!) - purely a hypothetical example you understand, but we're sure you'll get the point.
The trouble is before we know it, we have run up considerable balances on credit and store cards, as well as having a variety of other credit transactions such as bank loans and HP. As a result our finances become strained with the amount being paid out each month.
Problems then arise if income suddenly drops because of a reduction in overtime, commission or bonus payments. It then comes to the point where your outgoings exceed your income and this clearly can't continue. So it may be prudent to reorganise these types of financial commitments by consolidating them into one account with a debt consolidation solution providing a more manageable and affordable payment. Our experience has shown that customers can often reduce their monthly outlay by up to 50% - or even more!
- Affordability can be facilitated by borrowing over a longer repayment period
Remortgaging or the provision of a Secured Loan will usually allow your borrowings to be taken over a longer period of time than the debt you are repaying. So it's possible to select a repayment term that suits your pocket more comfortably, and will help take the strain out of your monthly outlay, and bring your debt back into the realms of affordability.
- Lower interest rates
It may be worth comparing the interest rates that you are currently paying on your present debt. Credit and store cards, personal loans and HP accounts may well be bearing interest rates at a much higher rate than those available on refinancing packages. Remember, there's usually no cheaper commercial way of raising cash than by borrowing against the security of your home.
The downsides to Debt Consolidation
There are undoubtedly downsides of consolidation of your debt by means of a remortgage or a homeowner secured loan, and it is important that you also carefully take into account the downsides, of consolidating your outstanding credit by a remortgage, and these include:
- The interest charges are likely to be greater
Despite the fact that raising capital to repay your debt against the security of your home will usually be at a cheaper rate of interest than that charged on the accounts you are repaying, such as credit and store cards, HP etc; because you are extending the term of your borrowing on the remortgage or homeowner secured loan, inevitably you will repay more interest over the longer term than you would have done had you paid your borrowings over the initial contractual period.
However, if your financial position is such that your outgoings are outstripping your income, then you may have little choice but to consider lowering your outlay by employing a debt consolidation refinance. If you don't, in the words of Charles Dickens' Mr. McCawber character, "The result: misery!",
- Your home is at risk
Because you are using your home as security for your remortgage or homeowner secured loan, you will be converting the consolidated debt from unsecured borrowing to secured borrowing. This means that in the even you are unable to make your repayments, your home could be repossessed as a result.
Debt Consolidation alternatives...
Along with debt consolidation, you should also consider the other alternatives that may be feasible in your circumstances, and these may include:
- Trading-down: this involves selling your home and down trading in order to release the equity in your home to pay-off at least some of your debt, and to reduce the size of your mortgage. However, trading down is not always an option.
- Cash In Investments: if you have money invested, you might also consider using this to repay your debt.
- Converting your Mortgage to Interest Only: this alternative may help in the short-term. However, it must be remembered that.
- Negotiate with your Creditors: your creditors may be prepared to accept reduced payments until your circumstances improve. Organisation's like the Citizens Advice Bureau will usually be prepared to help you with this task.
However, your circumstances may dictate that only a refinancing exercise will be appropriate. So if the most suitable route to help with this problem is a debt consolidation solution by way of raising money with a remortgage or secured homeowner loan, then one of our Advisors will generally try to build in a degree of flexibility wherever possible. When your fortunes do recover themselves, you will be in a position to step up your repayments so that your borrowings are repaid more quickly, thus reducing the term, and the interest you have to pay!
So you can see that the prudence of a debt consolidation solution depends on many factors. You can read more about debt consolidation in our Mortgage Glossary article 'Debt Consolidation explained'.
Make a fresh start with Debt Consolidation help from Shire Direct!
Naturally, before we can provide you with any advice or make any form of recommendation, one of our professionally qualified Mortgage Advisors would need to carefully assess your needs, circumstances and aspirations. Amongst other facets, our advisor will take into account your income and present outgoings, the extent and type of the credit you have outstanding, the interest charged, and penalties for early settlement.
So if you would like to make a fresh start and are interested in our available debt consolidation solutions, a quick call to one of our Advisors will put you in the picture. You'll find our service to be friendly, professional, helpful and not in the least bit stuffy! We are more than happy to discuss your circumstances, and our Freephone lines 08000 282 281 are open until 10.00pm daily (including weekends) - the call is free and without obligation and we'd love to hear from you. Alternatively, you can also enquire online at any time - in either instance, we'll be delighted to help in any way we can.
Mortgages/Remortgages: The overall cost for comparison is 9.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances. For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
Homeowner Loans: Rates from 8.9% APR variable, but typically 13.9% APR variable. Most customers are likely to receive a lower rate or the same rate as our typical variable rate - learn more about APR. Shire Direct also has a range of non-conforming loan plans with rates up to 19.9% APR. These plans are designed to help those who may have a more difficult credit history, including CCJ's and credit arrears, IVA and bankruptcy problems.
A broker fee of between 0% and 10% of the loan advance may be charged for arranging a secured loan.
All loans subject to status and secured on property.
The actual rate available will depend upon your circumstances. Written quotations on request.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
